SLM takes on new importance as organizations struggle to manage multiple third-party outsourcers, Web hosting firms, and contractors. Because providing reliable and dependable service has become critical, organizations are cutting weak links in their service-provisioning chains. Consequently, SLM has become part of the due-diligence process of identifying, selecting, and managing vendors.

SLM is an important consideration for internal auditors who review their organization''s management of IT resources. It corresponds with the accountability, availability, capability, and functionality attributes described in the SAC Model.

SLM is a discipline that manages agreed-upon levels of service between two parties — the service provider and service recipient. Typically, the provider is an IT organization and its customers are end users, or alternatively it can be a service provider such as an outsourcer or ISP whose customers are client organizations. Most organizations, whether they are contracting with internal or external resources, are unprepared for SLM and need guidance to establish a viable process. 

The objectives of SLM are to reduce costs and improve quality and quantity of service. Excellent SLM can yield business gains such as higher return on investment, lower IT expenditures, increased customer satisfaction, and new business opportunities. Conversely, poor IT services have a domino effect, causing the organization to lose goodwill, revenue, and competitive position. Hence, it is better to focus on SLM at an early planning stage rather than at a preventive stage after the damage is done. 

The Process
SLM helps ensure that IT services are provided to users in an expected and agreed-upon manner, within time, cost, and quality parameters. A draft of an initial service plan may list existing service providers, users, and contractors. The scope and parameters of the available versus desired services and IT’s SLM process should be well documented. To succeed, an SLM process should be staffed, championed by executive management, and equipped like any formal project — with a team leader, milestones, timetable, and resources.

SLM is a consensus-based, top-down process for building the detailed IT component-level controls and measurements that are necessary to support the business service requirements and overall business strategy. It maps the critical business processes to the detailed IT infrastructure service objectives so that IT can deliver service requirements within budget. The SLM process translates business objectives in increasingly precise terms, in an iterative fashion, resulting in a sufficiently fine-grained set of requirements for IT to deliver technical services that meet business needs. 

Although the business needs may be reasonable, it is probable that some service requirements will require a level of IT management that goes beyond the organization’s skills, tools, processes, or resources. The gap between desired and actual service levels is where SLM comes into play. 

Formally, SLM is a hierarchical process that requires a granular decomposition of service requirements. Informally, however, SLM involves a significant amount of give and take, requiring both the business and the service provider to negotiate until they have achieved an agreed-upon level of service. SLM is not a precise science. It is a process that requires effective group dynamics, leadership, political awareness, and negotiating skills. This process can break down due to errors in communication, unrealistic demands or expectations, inability or reluctance of IT to measure or report on service, lack of technology or skills, or other business or technical impediments.

An SLM Model
The model depicted below illustrates a method for a sound SLM process that defines increasingly precise levels of service, starting with the business processes and terminating with well-defined IT objectives in support of those processes. The model has two main sections — a business-process layer and an information technology layer that interface in the service-level agreements (SLA) that link performance objectives